According to a report by real estate specialist Savills, the number of real estate transactions in the first half of the year rose by 44 per cent to 57,700 units, with 46,100 flats and 11,600 villas sold, with off-plan activity strong.

Savills noted that the majority of off-plan transactions were for flats, while villas and townhouses were the preferred choice among existing homes.

The increase in off-plan transactions suggests that buyers tend to defer their commitment to high lending rates in the current economic climate. This is also reflected in the increase in new project launches, which jumped to 27,900 units in the first half of 2023 from 24,900 units in all of 2022.

It was observed that the majority of off-plan transactions were for flats, while villas and townhouses were the preferred choice for existing home developments. A total of 67 per cent of villa and townhouse transactions in the first half of the year were existing homes.

Damak Hill 2, Al Furjan and Dubai Hills Estates have been popular locations for ready-made villa units, the report added.

Swapnil Pillai, Associate Director of Savills Middle East Research, noted that historically, the property market in the UAE has been relatively slow during the summer months as many residents travelled during the school holidays.

However, this trend appears to be changing recently, as Dubai property continues to be favoured by residents and international audiences seeking stability in an uncertain economic climate.

Whilst it is still too early to comment on overall sales during the usually muted summer period, early indicators suggest that market activity is likely to remain strong. A total of 28,400 units were taken up across the city in the second quarter, recording a 33 per cent year-on-year growth rate, with flat units making up the bulk of the total.

According to Savills, asset prices continued their upward trend, but at a slightly slower pace.

Almost all micro-markets have seen double-digit price growth for much of 2022, but this momentum has begun to wane in areas with significant deliveries and planned supply.

Meanwhile, price growth in mature locations with limited upcoming supply and low vacancy rates has remained relatively consistent.

Flats in Palm Jumeirah witnessed the highest half-yearly price growth; average prices increased by 19 per cent compared to the second half of 2022.

Dubai Marina (14 per cent) and Downtown Dubai (11 per cent) are other high growth markets. other emerging locations such as Al Furjan (9 per cent), Arjan (6 per cent), Sports City (8 per cent) and Municipal Plaza (5 per cent) have also witnessed modest price increases, but upcoming supply and existing vacancies may hamper further price growth.

Villas and townhouses remain the most popular type of development. Compared to H2 2022, capital values increased by 9 per cent in Al Furjan, 8 per cent in Arabian Ranches, 13 per cent in Palm Jumeirah, and 14 per cent on average for developments in Springs and Meadows.

Global real estate services provider Savills has released its latest Dubai Residential Market Report for H1 2023, which shows that